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February 2017

Sterling poised for a busy political week

Published: Monday 06 February 2017

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Sterling poised for a busy political week

Australasian and Canadian data rules the week

What a fascinating weekend of rugby. The Six Nations produced a stunning Scotland-Ireland game and, as an Englishman, a very tense England-France game, but the women’s and under 20s games were perhaps more exciting. And, if they are going to entice Europe to watch American football, they are going to have to play the Super Bowl at a more sensible time.

In the UK, the Government’s Brexit plans get scrutinised in the House of Commons this week as they publish their White Paper on the matter and face committee stages on the Article 50 bill. We won’t learn much from the White Paper; and the opposition has committed to vote for the triggering of the exit plans, so other than a bit of showboating and grandstanding, I doubt we will see much volatility driven by MPs.

Sterling is holding its own and data is reassuring many, but the mire of the EU negotiations are ahead and that will make markets volatile; of that there is little doubt. This week also brings Purchasing Managers Indices for the construction and service sectors – and these will be interesting. We suspect that the data will be a tad less ebullient than the December numbers, but still on a growth path.

The Australasian date diary is quite brimming this week. First, we get the Reserve Bank of Australia’s (RBA) interest rate decision. No change is expected, but the tone of their statement will hopefully give some guidance on rate hikes later in the year.

We will also get the Reserve Bank of New Zealand’s inflation forecast (almost certainly higher) and we’ll get their interest rate decision on Wednesday – almost certainly on hold, but, as with the RBA, the mood of the committee is the key to the path of the NZ Dollar.

And Canada is also going to be in the news. As well as a barrage of housing market data and the Business Sentiment Index, Friday brings Canada’s employment data, which we think will be a little more positive than last month’s.

And the Daily Mirror is carrying a story about a woman who went to the internet to get some help after she had a bath and couldn’t get out. She used coconut oil in her bath, but after she pulled the plug and tried to get out, she described herself as “I just slide around like a giant greased up potato in a roasting dish”. I can’t stop laughing at that image!

Heaven’s Gate

An Uber taxi driver and a priest arrive at the pearly gates at the same time. St Peter books them in and shows the cabbie his new home; a lavish mansion house, fully equipped with butlers and servants and an indoor pool.

When the priest’s turn comes, he is shown a meagre hut with no electricity or heated water. The priest complains to St Peter: “How is it that the taxi driver gets a mansion and I only got this small hut? I’ve been working for Jesus all my life.”

“That is true,” says St Peter “but more people prayed in the back of that man’s cab than in your Sunday sermons.”